Here's more evidence of a schizophrenic recovery. Even with unemployment surging to 10.2 percent, October retail sales beat expectations riding a wave of auto sales. That's the good news. The bad is that sales in September were revised downward to a 2.3% decrease from an estimated 1.5% drop. The ugly news? We're still slogging through the worst two-year retail plunge in the last 50 years.
But how about that good news!
It was a great month for car sales -- the year's best, excluding August's Cash for Clunkers frenzy -- that also saw General Motors take its largest market share of the year. If you exclude cars, gas and building materials, October's retail increase (0.5%) was practically identical to September's (0.4%). It's looking more like my early prediction that Cash for Clunkers would devastate the auto industry in the latter half of this year isn't panning out. Good for the economy. Bad for my record as economic prognosticator.
What's the big picture here? Almost two years after the Great
Recession began, we're suffering through the worst retail collapse in
the last half century. With one out of every six Americans un- or
under-employed, American consumers simply don't have the firepower to
lead a strong recovery. That means recovery will be led by
than consumers -- so thank heavens for the strong recovery of Asian
markets to buy our stuff. Helping to spur our manufacturing-driven
recovery is the fact that the dollar
is down 12 percent since March. This is where things get interesting,
especially with Obama's trip to Asia. American officials claim to seek
a strong dollar, but so long as our recovery depends on consumers in
other countries, it makes little sense to lust for anything besides
cheap dollars and voracious foreign demand.
We want to hear what you think about this article. Submit a letter to the editor or write to firstname.lastname@example.org.